A new perspective on retail has emerged lately, one that is entirely lethal to the old one embodied by an establishment firm such as Nordstrom.
Up to now, e-commerce has been proposed as something more convenient and more efficient than brick-and-mortar. It would win because it could offer an infinite variety at a lower price, at increasing efficiencies and at narrower margins, in the long-run. All that remained was for the customer to adjust his habits to buying clothes and shoes over the internet, to eschew the mall, for the new model to gain momentum and displace the old ways.
If the pull of e-commerce selection is not enough, we also have the push of wonderful vibrant diversity in the malls nowadays. And aren't they lovely?
The new critique says that the old model, of a person tending a pile of goods in a store, like a flock of sheep, waiting for people to visit and to purchase these goods, is a profound waste of human capital and effort.
To work in retail is to waste one's life.
This is the converse of the old philosophy of Nordstrom, where the salesman has a "business" within the larger scope of the company, a "personal book" of contacts and relationships with customers. Retail sales is seen as a proper vocation, and at one time the department manager was considered the heart and soul of the Nordstrom business.
All of a sudden the retail role is absurd and sad. Think of the poor girl stuck in the Chanel boutique embedded in a full-line store all day. Will she see any customers at all? Will they buy anything? Does this even hope to pencil-out at the end of the week? Next year?
How does this make any sense at all?
Could she not spend her time – her finite life! – engaged in something more useful and consequential? Cannot the machines handle this dreadful plebian retail business for us?
Was she born and raised for this life? To move the SKUs?
Do you see, we have progressed beyond the old retail idea now, men tending a flock of goods, bought and arranged in advance by a buyer, generously placed out on display on some shelves and rounders, under the halogen lights. Do the shelves even pay for themselves now?
Nordstrom turns the store into a stage or spectacle, desperate to introduce variety or novelty (pop-up stores) into the space to attract attention and bring the shoppers into the space to see the goods, perhaps even to purchase them at full price.
Macy's cannot even maintain a full-line department store in downtown Seattle, a prosperous city.
The old retail is truly doomed.
I do not think Nordstrom can survive the transition to new forms. Too much time and wealth has been squandered, and it is a ruthless, pitiless war of incremental efficiencies, of vast supply and fulfillment chains, annihilating attrition with limited resources.
All is legacy now.
The Manhattan FLS is an extraordinary anachronism, following through on an obsolete idea because of sunk costs and saving face. It is a glorious last-gasp of the old model.
What is your exit strategy?